Thanks all. To respond to some and also give an update (but trying not to be too specific as I suspect litigation might end up being involved... ugh)...
Our supplier notified us of the problem and it was a fast moving situation. I went ahead and put all of our product (raw material and finished) on hold, and contacted the few customers we shipped finished product to and they put it all on hold, awaiting a review / analysis from the original supplier and update from our supplier.
Basically, I've got thousands of cases of product (and dollars) on hold throughout the chain but mostly in my facility.
Now the original supplier has come back and said they don't believe it to be something injurious as it's thin threadlike strands that are .38mm wide and of varying lengths with the longest being about 14mm. They, our supplier, and us, all have metal detectors that were not triggered anywhere in the process. They determined this to be a quality issue and think that it would be, at worse 'like a hair' to the consumer.
I'm pretty sure I don't agree with this substance. I went round and round in various regulatory codes to try and make sense of 'adulterated', 'injurious', and 'deleterious' and I think I've come to the conclusion that even though it's very likely to not be injurious it is not material added that is needed or can't be controlled by cGMP so I think it still fits the definition as deleterious and thus adulterated and can't be sold (at least interstate?).
Our supplier, for their part, has issued a withdrawal and want us to return our on hand inventories of the material. This doesn't pass the smell test to me (if you're not willing to stand by the product you've given to me, how can you expect me to stand by the product I'm giving to my customers made with your product?).
I'm fairly sure they're doing this because they don't want to pay for all of our already made and shipped cases.
But my take on it is moot at this point because the product is all on hold so there's no risk, and our legal counsel is getting involved.
Thanks for helping set my mind right everyone, I appreciate you and the IFQSN